Tax Relief for Florida Homeowners Affected by Hurricane Helene and Milton: Understanding Casualty Loss Deductions

Natural disasters such as hurricanes can cause extensive damage to homes and property, leaving homeowners to face not only the emotional toll but also financial burdens. While the recovery process can be overwhelming, it’s important to know that there are ways to receive financial relief through your taxes. Specifically, homeowners affected by disasters like Hurricane Helena or Milton may be eligible for casualty loss deductions on their tax returns.

At Pelican Tax Certified Public Accountant, PLLC, we understand the challenges you’re facing and are here to help guide you through the process of claiming these deductions. In this article, we’ll explain what casualty loss deductions are, how to claim them, and how our team can support you in ensuring you receive the full benefit available.

What is a Casualty Loss Deduction?

A casualty loss is defined by the IRS as damage, destruction, or loss of property due to a sudden, unexpected event. For homeowners, this can include damage from hurricanes, tornadoes, floods, earthquakes, and other natural disasters.

If your property was damaged or destroyed by Hurricane Helena, Milton, or any other federally declared disaster, you may be eligible to claim a casualty loss deduction on your federal income tax return. This deduction allows you to recover some of the financial losses that occurred as a result of the disaster.

Eligibility for Casualty Loss Deductions

To qualify for a casualty loss deduction, you must meet the following criteria:

Federally Declared Disaster Area: Your home must be located in a federally declared disaster area. If your home was impacted by Hurricane Helena or Milton, the IRS likely recognizes these events as federally declared disasters, which means you may be eligible to claim a deduction.

Qualified Property: The damage must occur to property you own, such as your home, personal belongings, or rental properties.

Losses Not Covered by Insurance: If you received an insurance payout for the damage, you can only claim the portion of the loss that was not reimbursed by your insurance. If your insurance covered the entire loss, you would not be eligible for a casualty loss deduction.

How to Calculate Casualty Loss

The IRS has a specific formula for calculating your casualty loss. Here’s an overview of the key steps:

Determine the Fair Market Value (FMV) Before and After the Disaster: The difference between the fair market value of the property before the disaster and the fair market value after the damage is the amount of your loss.

Subtract Insurance Reimbursements: If your insurance provided any compensation, subtract those amounts from the loss.

Apply the $100 Rule: You are required to subtract $100 from each casualty loss event for each property. For example, if you suffered multiple damages, you must apply this $100 deduction separately for each event.

Filing for Casualty Loss Deductions

To claim a casualty loss, you must fill out Form 4684, “Casualties and Thefts,” and attach it to your 1040 tax return. This form will help you calculate the loss and determine the amount that can be deducted from your taxable income.

Special Considerations for Disaster Victims

If you were impacted by a federally declared disaster like Hurricane Helena or Milton, you may be eligible for special disaster relief provisions, such as:

Claiming the Loss in the Year of the Disaster or the Prior Year: Normally, you must report casualty losses in the year the event occurred. However, the IRS allows you to choose to claim your loss in the prior year’s tax return, which could result in a quicker refund. This is especially beneficial if you need immediate financial relief.

Extended Deadlines for Filing: If you were affected by a disaster, the IRS may extend the deadline for filing your taxes. Be sure to check for any updates from the IRS regarding filing extensions for disaster victims in your area.

How Pelican Tax Can Help You

At Pelican Tax Certified Public Accountant, PLLC, we specialize in helping homeowners and business owners navigate the complex tax laws surrounding casualty loss deductions. Our team of experienced CPAs can ensure that you receive all the relief you’re entitled to and that your return is filed correctly and on time.

We’ll walk you through every step of the process, from assessing the damage to calculating your loss and filing the proper forms. With our expertise, you can have peace of mind knowing that your tax return is in capable hands.

Final Thoughts

Recovering from a natural disaster can be a long and difficult process, but with the right guidance, you may be able to reduce the financial strain through casualty loss deductions. If you’ve been impacted by Hurricane Helena, Milton, or any other disaster, don’t miss out on this valuable tax relief opportunity.

Contact Pelican Tax Certified Public Accountant, PLLC, today to schedule a consultation. Let us help you take the next step toward financial recovery and ensure you maximize the tax relief available to you.